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JPMorgan Chase, the largest U.S. bank measured by assets, has bought 33 smaller companies this year as of 7 July, the Financial Times reported.
The purchases include OpenInvest, a U.K. online asset manager that enables investors to customize portfolios based on social and environmental values, and a minority share of C6, a digital bank in Brazil.
Prices of the deals were not reported.
Chase’s 33 deals in the first half of this year puts the bank on track to exceed the 34 deals it closed during all of 2020.
“It’s a string-of-pearls approach where they buy smaller firms to advance their asset management business with lower cultural, operating, and goodwill hurdles that come with a large acquisition,” Wells Fargo analyst Michael Mayo told the FT.
The deals also reveal JPMorgan chair James Dimon’s view of the future of the banking business.
Traditional banks are losing customers to online financial services and socially conscious money managers.
“The focus” of the acquisitions “seems to be on companies that can support JPMorgan’s digital strategies or companies that can give [the bank] an advantage in the rapidly growing area” of investments shaped around environmental, social, and corporate governance concerns, James Shanahan, an Edward Jones analyst, said to the FT.
TREND FORECAST: As we noted in “Cheap Debt Funds New Private Equity Deals” in our 5 January,201, issue, the combination of cash on hand and low interest rates will continue to let Bigs buy their way to be Even Bigger. Small businesses will continue to struggle, many will still fail, while Bigs take an ever greater share of economic power and control.